Municipalities win extra grants but still face historic cuts

Municipalities facing severe financial pressure have received one billion kroner in special grants, but mayors say the allocation system is failing, DR reports. Forty five municipalities applied for a total of 2.7 billion kroner, while only 22 received funding.

The special grant pool was described by the Ministry of Economic Affairs and the Interior as historically large. However, enthusiasm among the municipalities that received money is limited because demand was more than twice the available funding.

Langeland Municipality was awarded 68 million kroner, the third highest amount. It had applied for 115 million kroner.

“It is like having a bucket of cold water thrown over your head,” said Langeland mayor Jørgen Nielsen (K). He said he was extremely disappointed by the amount, which is only three million kroner more than the municipality has received in previous years and does not cover projected increases in prices and wages.

Nielsen said the allocation could lead to “historic” cuts in Langeland. He also criticised signals from the government that differences between rural and urban areas would be reduced and Denmark made more equal.

Hedensted Municipality applied for 90 million kroner but received nothing. Mayor Ole Vind (V) said the municipality’s finances were not particularly weak in isolation, but that the equalisation reform had left Hedensted as the fourth poorest municipality in Denmark.

Guldborgsund Municipality will receive 60 million kroner after applying for nearly 200 million. Mayor Simon Hansen (S) estimates that the municipality will now need to make savings of around 80 million to 100 million kroner. He called the current equalisation and grant system “hopeless” and said the large number of applications showed that it was not working properly.

There was somewhat more satisfaction among mayors in Odsherred, Faxe and Vordingborg, which are set to receive grants in the tens of millions. However, their awards were still substantially lower than the amounts they had requested.

The largest grant, 223 million kroner, will go to Lolland Municipality, which is facing particularly serious financial difficulties. Mayor Marie-Louise Brehm Nielsen of the local list Din Stemme said the money was more than 100 million kroner short of covering the municipality’s expected deficit.

“This is not cream and golden handles. It is simply to keep daily operations going somehow, and it is still incredibly far from the goal,” she said.

Economic and Interior Minister Pia Olsen Dyhr (S) did not respond to the mayors’ specific criticism. In an earlier interview with DR News, she said the government had focused on the municipalities most in need. She also said a perfect equalisation system would be preferable, but that problems would remain even under a new system because the criteria could never be entirely accurate.